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Fortunately, there is, and it comes in the form of captive insurance. In fact, over 90% of Fortune 1000 companies utilize a captive insurance company. Even so, many business owners don’t know they exist, much less how they operate.

Peter J. Strauss

So, what is a captive insurance company? Quite simply, a captive insurance company is a company established with the primary objective of insuring—or reinsuring—the risks arising from the operating business of its owners, and to provide a broad range of risk management capabilities.

In my new book, The Business Owner’s Definitive Guide to Captive Insurance Companies, I walk readers through every step of the captive establishment and management process so they too can obtain the benefits realized by those Fortune 1000 companies. As a business owner, you’ll learn not only the principles and benefits of captive insurance, but also how to implement a plan to create your own captive insurance company, select an appropriate captive manager and improve your company’s financial well-being.

Among many other things, owning and operating your own insurance company gives your business three key advantages.

Access to insurance that may otherwise be unavailable

A captive insurance company—as its name suggests—is owned by your business or by you personally, as a business owner. As such, it allows for a more tailor-made policy that covers the exact risk of your business oftentimes at a lower cost than traditional third-party insurers.

A captive has the freedom of policy customization which can provide an opportunity to tailor the specific terms and conditions in the policy. Utilizing policy customization can allow for coverages that are otherwise commercially unavailable or too expensive to obtain in the commercial market.

The opportunity to add another cost control center in your business

The traditional insurance market generally sets prices in relation to the industry as opposed to the company’s loss history or individual trends. With a captive, your company’s loss history and industry trends are a foundational piece of the pricing of your individual policies. This allows you to purchase insurance in a wholesale manner rather than a retail manner

In doing so, you effectively cut out the middlemen who increase the costs to cover their overhead. You own the insurance company and you can participate in stabilizing the prices. This reduction in the costs of risk management can lead to improved loss control efficiency and promote greater awareness of the factors that give rise to losses.

Increased income through tax savings created specifically for captive insurance companies

Finally, the captive premium expense is tax deductible as an ordinary and necessary business expense, and premiums collected by the captive are tax-exempt up to $2.2 million per year, per captive. Over time, as premiums accumulate, they can be invested to generate additional income which can be distributed back to the shareholder.

With my new book, it is my hope that business owners across the country will begin to understand these advantages, and take action. The lesson is simple: by creating your own captive insurance company to cover the risks of your business, you can create a more diverse, on-point scope of coverage, reduce your out-of-pocket expenses, and improve your company’s bottom line.

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This is the place to find detailed information about the many products and services Forbes has to offer. We'll give you the inside scoop including how to order, join, participate, and buy. From subscriptions and books to conferences and business school, wine and travel, TV ...